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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 164.53

-0.4%

Jan 14 3:59 PM EST

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To: David E. Taylor who wrote (21960)	5/1/2002 1:41:48 AM
From: brational	Read Replies (2) of 197214

In the excellent analysis of chipset ASP's presented by David, there is one additional possibility that comes to mind, other than the two mentioned: So, a couple of possibilities again. Either: (1) QCOM had cut the ASP for 95A/B chips even further; or (2) QCOM was also now discounting the 1x chips. I am not an accountant and I'm not sure how chipset revenues should be booked. However, it occurs to me that the revenues reported in a given quarter might not necessarily correspond to the chipsets that were shipped in that same quarter. Typically, the buyer receives an invoice with their shipment, and has some time (ranging from several weeks to a couple of months) to make the payment. For instance, the consolidated balance sheet at the end of the earnings report (http://www.qualcomm.com/press/PDF/Q202er.pdf) shows net accounts receivable in the amount of $452,145. Wouldn't this amount include invoices still due to QCT for chipsets shipped during this past quarter? This would naturally affect the calculations shown, and the conclusions drawn about the respective ASP's for the diferent chipsets. So the $343,815 reported this past quarter may include an amount corresponding to some chipsets shown as sold in the preceding quarter, in addition to only a fraction of what was reported shipped in the last quarter. One could make an assumption of an average invoice payment time of say about a month, in which case only 2/3 rds of the chipsets shipped this past quarter would have been booked with the quarterly revenues, with the remaining amount to be paid now included in accounts receivable. Similarly, one third of the preceding quarter's chipsets would show revenues in the last numbers. I have not tested this hypothesis. I hope others have more information about how revenues get booked relative to when chips get shipped. BR

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